Pending Home Sales Near 12-Year Low as Rates Top 7%
Contract signings on existing homes have collapsed to levels last seen in 2014, with mortgage rates above 7% sidelining buyers.
U.S. pending home sales have fallen to their weakest point in roughly a decade, a stretch not seen since 2014 outside the brief pandemic-driven freeze of 2020, according to new data. The sharp pullback signals deepening strain across the residential real estate market as affordability pressures mount.
Mortgage rates climbing above 7% have been a primary driver, raising monthly payments on new loans to levels that have effectively priced out a significant portion of prospective buyers. The rate environment has turned what might otherwise be routine purchasing decisions into financial calculations many households cannot make work.
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Despite the demand drought, inventory conditions are beginning to shift. The total supply of homes listed for sale rose to its highest level since March 2020, suggesting sellers are returning to the market even as buyer pools shrink — a dynamic that could eventually pressure asking prices downward if the standoff persists.
Transaction fallout is also accelerating. Roughly 14.5% of homebuying agreements collapsed in September before reaching closing, reflecting a market in which buyers are increasingly walking away from deals — whether due to financing difficulties, failed inspections, or shifting expectations about home values.
Analysts note the combination of elevated rates, rising cancellations, and swelling inventory presents a more complex picture than a simple supply shortage, pointing instead to a market caught between reluctant sellers and sidelined buyers. Continue reading at All Financial Services & Investing.
